ABSTRACT The long-term goal of this project is to elucidate signaling mechanisms underlying synapse development and plasticity. Our studies in the previous funding cycle demonstrate that Wnts, pivotal and phylogenetically conserved synaptic organizers, are released via exosomes, extracellular vesicles containing proteins and RNAs, at synaptic boutons of the Drosophila larval neuromuscular junction (NMJ). Our studies also provide evidence that a retrograde signal mediated by Synaptotagmin 4 conveys Wnt signals, and is also controlled by exosome release from presynaptic boutons. These studies place trans-synaptic exosome communication as a key coordinator of pre- and postsynaptic modifications. Cell-cell signaling through exosomes is just beginning to be documented during immunity, the spread of cancer, and intercellular prion transmission in the CNS. In addition, exosomes are emerging as promising vectors for the delivery of targeted therapies. However, most studies of exosomes have been carried out in cell culture, and exosome function in the nervous system is virtually unknown. Our demonstration that exosomes mediate trans-synaptic signaling in vivo, establish Drosophila as a powerful model system to efficiently unravel mechanisms of exosome release and trans-synaptic transfer. Wnt misregulation is associated with a number of cognitive disorders, such as Schizophrenia and Alzheimer's disease. Thus, understanding the mechanisms of Wnt signaling in the nervous system has important implications for the design of clinical strategies to treat these conditions. In this project our experimental strategies will make extensive use of genetics and state-of the art cellular approaches in vivo, to elucidate the mechanisms of exosome release at synaptic sites and the principles underlying the exosome regulation of synapse development and plasticity. We will (1) identify the molecular machinery mediating exosome release by synaptic boutons, (2) determine the synapse specificity or global nature of retrograde signaling through exosomes, and (3) characterize the role of a Wnt protein in Synaptotagmin 4-mediated retrograde signaling. The outcomes of this project will constitute a significant advancement in our understanding of Wnt signaling at synapses, and promises to accelerate the development of exosomes for targeted therapies.